But today Blaenau Gwent councillors gave the plans their backing with council leader Hedley McCarthy saying the "benefits for us all are huge".

There will be the creation of thousands of jobs when the circuit comes into operation plus the development of engineering, science and technology businessesHedley McCarthy, Blaenau Gwent council leader

"There will be the creation of thousands of jobs when the circuit comes into operation plus the development of engineering, science and technology businesses," he said.

"For so long, the heads of the valleys have needed sustainable investment.

"We are looking to the future and that future is bright."

The plans also include an international kart track and motocross tracks as well as a technology park for research, development and support services in the automotive and motor sports sectors.

Developers have revised up the estimated number of jobs created by the plans quoting 3,000 construction posts as well as 4,000-6,000 new full-time jobs when the track is due to completed in 2015/16.

Michael Carrick, chief executive of developers the Heads of the Valleys Development Company, pledged to "deliver a truly innovative and sustainable business, helping to deliver long term economic and social benefits for the region".

...history and experience suggest that an investment of this magnitude in a motor racing circuit will never produce a return for investors.Jonathan Palmer, Association of Motor Racing Circuit Owners

He said: "It is a hugely important development, not just for the regeneration of Blaenau Gwent but also for the UK economy, and will enable significant private capital to be mobilised.

"This is a showcase for a new type of investment model, a partnership between private investment and government to deliver a transformational business to the region."

A £2m loan from the Welsh government has been made and the developers are trying to secure more public money.

The rest of the money is being borrowed from banks with the intention to raise £150m from institutional investors such as pension funds which would become part owners of the track.

Despite some environmental concerns, the scheme occupying 335 hectares (830 acres) was recommended for approval by council officials before councillors gave it their approval.

Meanwhile, the Association of Motor Racing Circuit Owners (AMRCO) said the track would harm motorsport.

Welsh government inspectors are still considering whether to review the project

Jonathan Palmer, chairman of AMRCO which represents 17 UK race tracks, said: "The UK circuit industry welcomes innovation and investment, however history and experience suggest that an investment of this magnitude in a motor racing circuit will never produce a return for investors.

"It is a real concern that this will turn into a white elephant at the expense of much needed public funds, and we hope this project will now be subject to careful scrutiny by Welsh government inspectors and the Wales Audit Office."

In response, a spokesman for the Circuit of Wales said:"It's no surprise that we are seen as a competitive threat to many of the existing sites that we have in the UK.

"Over the course of the last three years we have met with senior management of 11 of the 17 circuit owners, many of whom have input into our business plan and several operators who have expressed interest in providing services to the circuit."

Welsh government inspectors are still considering whether to review the project.